Trauma Center Funding Gaps and Needs Assessment

1. Avalere Analysis: Trauma Center Funding Gaps and Needs Assessment Avalere Health | An Inovalon Company March 1, 2018

2. Table of Contents Needs Assessment Overview Key Trends Reshaping the Trauma Center Landscape Key Pressures on Trauma Centers 1 | 2 | 3 | 6 | 7 | 8 |

3. Needs Assessment Overview Objective • TCAA has partnered with Avalere to assess federal funding needs for state and regional trauma systems and centers • Specifically, Avalere conducted a survey of a diverse set of trauma center and hospital system CEOs, medical directors, and other trauma center executives from across the United States About Avalere • Avalere Health is a DC-based healthcare consulting firm, specializing in strategy, policy, and data analysis for life sciences, health plans and providers • Avalere brings a broad perspective on the marketplace to support provider business goals in an increasingly integrated and financially constrained healthcare environment CEO: Chief Executive Officer

4. Methodology • Analysis • Avalere conducted direct interviews with TCAA members that focus on current funding gaps and the needs of specific trauma institutions and regions • First, Avalere outlined key research questions to develop a standardized interview guide • Second, Avalere interviewed 5 hospitals to glean insights on their experience and how it relates to broader concerns in the trauma landscape • Up to 3 participants from each hospital were present on each call, in order to incorporate perspectives from multiple voices at a given institution • Participating Stakeholders • Overland Park Regional Medical Center, KS • University of Vermont Medical Center, VM • University of Tennessee Medical Center, TN • University of New Mexico Hospital, NM • Sharp Memorial Hospital, CA TCAA: Trauma Center Association of America

5. Key Takeaways from Our Research OVERALL FINDINGS from the interviews: There was significant variation in the financial health and preparedness of the trauma centers participating in the study In general, the trauma centers are stable, however there are substantial vulnerabilities to their long-term sustainability and viability Trauma centers would benefit from additional funding to bolster disaster preparedness, stabilize clinical staffing, and ensure sufficient capacity for high-quality trauma care

6. Key Trends Reshaping the Trauma Care Landscape

7. Diverse Array of Trends Ratcheting Up Pressure on U.S. Trauma Centers Outlook: The majority of surveyed trauma centers appear relatively stable, but broader health system challenges pose risks to trauma centers in the near future Funding Cuts: Medicaid DSH payment cuts, as well as cuts to Medicare 340B program pose challenges to trauma centers and broader provider landscape Political Uncertainty: Medicaid reforms, ACA exchange market uncertainty, and worsening payer mix threaten the long-term stability of trauma centers Financial Viability Capacity Concerns: Many trauma centers operate at full or nearly full capacity, making it difficult to cover often vast geographical regions Aging Population: With an increasing population over the age of 65, trauma centers will continue to see more geriatric trauma cases Patient Demands External Pressures Opioid Crisis: Trauma centers have seen a spike in opioid-related trauma cases over the past few years Flu Epidemic: Epidemics such as the recent influenza virus outbreak impose burden on trauma centers, leaving them vulnerable to capacity issues

8. Participants Point to a Diverse Set of Challenges Sufficient Staffing Many of the trauma center interviewees, especially those in rural areas, pointed to attracting and maintaining high-quality specialists as a top challenge Staffing Capacity Concerns Capacity Trauma center executives, noted that, given that they operate at nearly 100% capacity, they are vulnerable to mass trauma event (e.g., mass casualty event, influenza epidemic) Emergency Preparedness/Junior Staff Training Training and Education Several hospitals noted that they have concerns with a lack of training and education initiatives (e.g., emergency training, residency/fellowship programs), which could greatly improve care delivery Resources/Funding Other Considerations • Ongoing cost-saving measures being pursued at the federal level (e.g., Medicaid grant funding, per-capita caps) may inhibit trauma care capabilities As funding becomes more of a challenge, trauma centers have become more vulnerable, particularly to sudden, large-scale spikes in trauma cases

9. Staffing Trauma Centers Struggle to Recruit and Maintain Highly Specialized Physicians • The majority of participants pointed to staff recruitment and retention as a primary concern related to the long-term viability of their trauma programs • Participants noted the difficulties of retaining highly specialized staff due to the strains of 24-hour trauma service • In particular, trauma centers in rural areas discussed the unique challenges they face recruiting physicians • In an increasing number of cases, trauma centers must offer extremely high salaries to attract top talent “Fewer physicians are willing to take the risk of a trauma job.” “We don’t have a great economic model for attracting new doctors—it’s difficult to get physicians and surgeons who can track and sustain well.”

10. Capacity Trauma Centers Expressed Concern with Bed Space and Potential Capacity Vulnerabilities • A majority of the participating trauma centers responded that they typically operate near full capacity • One participant expressed significant concerns about the sustainability of their trauma center and cited an urgent need for additional financial support • Others conveyed that they were in a stable position with their trauma programs, but that a rise in geriatric trauma cases is putting new strains on their systems • Participants also noted that the timely discharge of trauma patients is difficult, particularly for low-income patients who lack adequate outpatient settings for recovery “As we continue to grow, we have an increasing issue of bed shortages.” “The primary mechanics of our injuries are falls—50% [of cases] are due to falls, and frequently Medicare pays less. We want more funding to bring in more true geriatricians.” “One of the biggest issues is [patient] flow through the institution.”

11. Training & Education Several Trauma Centers Worry About a Lack of Adequate Training and Education Programs • Nearly half of the participants do not feel that their trauma center is adequately prepared to respond to a public health emergency (e.g., a mass shooting) • Multiple participants expressed doubts that their staff are adequately trained and educated for a mass casualty event • Participants also noted that additional funding could improve their ability to run residency programs (e.g., neurosurgery, orthopedics) “If we had a disaster, it would be, to some degree, a disaster.” “We have a lot of education and training on [mass casualty events], but it’s difficult to say we’re 100% prepared. We could always use more training.” “On a scale of 1-10, we’re probably at a 6 [in terms of public health emergency preparedness].”

12. Other Considerations Several Other Factors Pose Significant Challenges to Hospital Systems and Trauma Centers • Despite a range of responses, a majority of participants felt that their trauma programs were stable, but that there were mounting pressures on the broader health systems that posed threats to their trauma programs (e.g., cuts to DSH payments, 340B program) • In particular, multiple participants noted that emergency department diversions have increased with the flu outbreak • External factors like the opioid epidemic have also lead to an uptick in trauma cases in certain regions • Similarly, federal proposals such as Medicaid block grants or per capita caps pose financial risks to institutions “With the flu, the entire [hospital] is overflowing, which puts pressure on every part of the hospital, including our trauma program.” “Over the past few years, [opioid-related] overdoses have increased. We estimate nearly 1 overdose a day at our location.” “Cuts to 340B have been very challenging. Our revenue stream is turning on its head very quickly.”

13. Potential Impact of Additional Resources

14. Trauma Centers Could Achieve a Range of Benefits From Additional Funding • Emergency Preparedness • Multiple trauma centers expressed doubt whether they could handle a mass casualty event • New funding could provide necessary training and capability to more adequately prepare for a mass casualty situation • Staff Training and Education • Potential new funding could allow more centers to pursue residency programs • Funding could also allow for staffing of new dedicated performance improvement systems • Recruitment and Retention Initiatives • With trauma specialists becoming more expensive and difficult to retain, additional funding would allow centers to improve incentives for high-quality personnel Although there is not a one-size-fits-all benefit from additional funding, trauma centers agree on several key areas for improvement

15. Appendix

16. Trauma Care Plays a Central Role in the U.S. Health Care System Trauma Statistics Trauma is the top cause of death from age 1 to 46 Amount spent in health care and lost productivity annually Trauma-related funding makes up only 0.02% of all NIH grant funding 0.02% $671B #1 In the United States, injury accounts for over 150,000 deaths and over 3 million non-fatal injuries per year NIH: National Institute of Health Source: (1) NIH. 2014. Increasing trauma deaths in the United States: https://www.ncbi.nlm.nih.gov/pubmed/24651132. (2) CDC. 2015. CDC’s WISQARS™ (Web-based Injury Statistics Query and Reporting System): https://www.cdc.gov/injury/wisqars/index.html; (3) CDC. 2015. Years of Potential Life Lost (YPLL) Reports, 1999 – 2015: https://webappa.cdc.gov/sasweb/ncipc/ypll10.html; American Community Survey. 2015. ACS: https://www.census.gov/programs-surveys/acs/; (4) Source: Stanford University Medical Center. 2008. Standford University Medical Center Community Benefits Survey: http://www.stanfordchildrens.org/en/about-us.

17. Trauma Center Classifications *A Level I trauma center must admit at least 1,200 trauma patients yearly or have 240 admissions with an Injury Severity Score of more than 15. • Long-Term Trauma centers are ranked by the ACS from Level I (comprehensive service) to Level III (limited-care) – the different levels refer to the types of resources available and the number of annual patients admitted

18. Thank You